Key Blair adviser picked to lead "serious" civil service efficiency review

After decades of reviews aimed at driving down the civil service's running costs, Sir Michael Barber, former chief of Blair's delivery unit, is hailed by one Whitehall-watcher as "much less celebrity and much more focused on getting the job done"

Image: Sir Michael Barber addressing the Institute for Government in 2015. His appointment as adviser to the Treasury's latest efficiency review was welcomed as "a very good sign?". Credit (IfG)

By Matt Foster

06 Mar 2017

A key adviser to Tony Blair has been drafted in to lead the latest in a long line of civil service efficiency reviews, in a move that has already been welcomed as a sign that the Treasury is "serious" about changing the way Whitehall works instead of "chasing big pound signs".

Before he was ousted as chancellor last year, George Osborne ordered departments to come up with an extra £3.5bn in savings on top of the already-tough settlements agreed at 2015's cross-government spending review.

Osborne's successor, Philip Hammond, has opted to keep that efficiency review target in place, and has asked departments to start drawing up plans to shear between 3-6% from their 2019/20 running costs to meet the aim.

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It has now been announced that Barber – who led former prime minister Blair's Downing Street delivery unit during the three-time Labour election winner's second term in office and is now co-chair of the Centre for Public Impact – will be providing significant input into the process.

In a statement, the Treasury said Barber had been "appointed to investigate how government can make efficiency improvements central to its culture and practices".

The finance ministry has made clear that Barber will not be telling departments how to make specific savings, saying his input will be "separate and complementary to the work already underway by government departments to identify savings".

"The focus of the review is not chasing big pound signs, but actually asking: how do we work, how do we track and measure performance?" – Julian McCrae, IfG

Instead, it appears that the former Number 10 heavyweight is taking a broader look at the way government tracks the long-term effectiveness of cost-cutting measures.

The Treasury statement said Barber's work "will be a crucial step in changing how efficiency is viewed, measured and talked about in government so that ongoing improvements in the delivery of public services become business-as-usual".

That approach has already been welcomed by Whitehall-watchers at the Institute for Government.

The think tank's deputy director, Julian McCrae, told CSW that the Treasury's review was shaping up to be a genuine attempt at "embedding efficiency" rather than trying to "chase down £3.5bn of savings", a figure he pointed out was "neither here nor there in the grand scheme of the fiscal targets".

"I think it's very sensible getting Michael in," McCrae said. "The focus of the review is not chasing big pound signs, but actually asking: how do we work, how do we track and measure performance? I hope he'll also go into how the civil service rewards people, how it develops careers – because that's the really essential stuff."

McCrae, who was highly critical of the Cabinet Office's Single Departmental Plans, a much-trumpeted attempt to better align spending totals with manifesto commitments, said there had long been a sense that government needed to "improve the way it does planning and performance on a cross-departmental basis".

"It's seven years since the 2010 Spending Review, the start of austerity," he said. "It's very clear, looking at any reasonable forward projections of the economy and the political scene, that that approach is going to be continuing well into the next parliament.

"So it feels like exactly the right time for the civil service to be saying to itself: how do we really gear the machine to drive this kind of performance improvement?"

"A real specialist"

Barber's review is hardly the first time the civil service has been asked to focus on efficiency – and such exercises have a chequered history.

In 2003, Labour commissioned Sir Peter Gershon, the then-chair of the Office of Government Commerce, to carry out a wide-ranging review of departmental spending, which the Treasury said would "deliver gains equivalent to £20 billion a year by 2007-08".

But the National Audit Office gave a less-than-glowing assessment of the sustainability of the exercise, with the spending watchdog concluding in 2007 that only a quarter of the Gershon savings reported by departments "fairly represent efficiencies", and MPs warning that government still suffered "serious problems in measuring efficiency".

David Cameron and George Osborne meanwhile drafted in retailer Sir Philip Green to lead another "efficiency review" in 2010, with the final report saying civil servants had "no motivation to save money" and "no process for setting and challenging detailed departmental budgets".

McCrae told CSW that there was a clear difference between "announcing efficiency reviews" and actually putting their recommendations into practice.

But while he said Green, a Whitehall outsider, had been "an interesting, high-profile" choice to lead Cameron's review, Barber represents "a serious player who really understands the culture he's going into, and the types of things that are possible".

"He's a real specialist in this stuff," McCrae added. "It's a very good sign that you've got an appointment who is much less celebrity and much more focused on getting the job done. And I think that's reflecting quite a serious attitude around the efficiency review from Treasury ministers and officials."

But McCrae said key questions still remained on Barber's remit – and whether his final report would be taken on board by ministers.

"If it's really about changing working practices and it gets linked into how the civil service promotes, develops, and rewards people inside Whitehall, as well as how Whitehall thinks about how it interacts with the NHS and the education system, then it could be really powerful," he said.

"But that's quite a big 'if'. Just setting up an efficiency review and getting somebody really credible to come in to lead it does not mean that you're definitely going to sort the problem. So this is a long-term game that they really need to be investing in."

Barber himself told CSW in 2015 that the substantial cuts outlined by the Treasury at that year's Spending Review would require "fewer, more effective civil servants, much better use of technology and more empowerment of, and responsibility for, individual citizens".

An update on the latest efficiency review is expected in the autumn.

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